Hits and Misses, Surprises and New Beginnings in 2013

The firm’s top strategists – Mark Luschini, Greg Drahuschak and Guy LeBas – take a look back at some of their hits and misses for 2012, discuss the potential for a strong year for equities and reveal their top surprises for 2013. -Janney Montgomery Scott

Hits and Misses – Mark Luschini, Chief Investment Strategist, reviews some of the firm’s hits and misses in 2012 and what they forecast for the each in 2013, whether it’s adjusting expectations or holding steady. They thought 2012 would produce positive results in the financial markets backed by the U.S. economy continuing to grow, albeit moderately, and the receding chances of an unwelcome macroeconomic event. On balance for their scenarios, most of what they posited was pretty close to script. But as always, there were some exceptions which he discusses.

A New Beginning – Greg Drahuschak, Market Strategist, discusses the affect “The Act,” or more accurately the compromise bill, could have on the markets moving forward. In Janney’s view, the most economically sensitive sectors are likely to lead the market higher, with tech standing out on a valuation basis, since companies increasingly attempting to lower costs often turn to tech solutions. Considering the uncompetitive posture of most other investment areas, save for tech and energy, 2013 could be a year when equity becomes he most favored investment medium for institutional and individual investors alike.

Top 10 Surprises for ‘13 – Guy LeBas, Chief Fixed Income Strategist, provides insight into the Top Surprises for 2013 from the firm’s FI team that they define as macroeconomic and capital markets-wide events that have a reasonable chance of occurring, yet are not priced into the markets efficiently. For 2013, their trading thesis is more focused on managing interest rate risk in portfolios than it is reaching for incremental return. As a result, the risks posed by the potential surprises are all the more significant. As we look out further into 2013, he believes the potential for unexpected events is much more diverse.